Buffett is shopping for again extra Berkshire inventory this yr after file $25 billion repurchase in 2020

Warren Buffett during an interview with CNBC’s Becky Quick on Feb. 24, 2020. It turned out that the billionaire investor was another massive year of shying away from breakthrough acquisitions even after sudden market money and breakthrough acquisitions in an expensive market Cash balance.

Gerald Miller | CNBC

When the coronavirus pandemic hit the markets in 2020, Berkshire Hathaway bought back a record amount of company stock from Warren Buffett. According to the conglomerate’s annual letter released on Saturday morning, the buying frenzy has continued through 2021.

In the fourth quarter, the company repurchased approximately $ 9 billion worth of Berkshire stock, bringing the buyback to a record $ 24.7 billion in 2020.

“Berkshire has bought back more shares since the end of the year and will likely continue to reduce its number of shares in the future,” said its annual letter.

During the third quarter, the conglomerate bought back $ 9 billion of its own shares, up from $ 5.1 billion in the second quarter. The numbers compare to the total of $ 5 billion the company spent on buybacks in 2019.

Buffett stressed that the company will only conduct share buyback programs if it believes stocks are trading below their intrinsic value.

“We are by no means of the opinion that Berkshire stock should be bought back at any price,” Buffett said in the annual letter. “I emphasize this point because American CEOs have an embarrassing record of spending more corporate funds on buybacks when prices are up than when they are fueling up. Our approach is exactly the opposite.”

Berkshire’s operating income, which Buffett shareholders should be focusing on, was $ 5.02 billion for the fourth quarter, compared to $ 4.42 billion for the same period last year. For the full year, operating income fell 9% to $ 21.922 billion when the pandemic hit Berkshire’s corporate conglomerate.

The company’s net income, responsible for Berkshire’s large investments in the public market, rose 23% year-over-year to $ 35.835 billion. For the full year, however, net income declined 48% to $ 42.521 billion.

Berkshire Hathaway Class A shares hit a new all-time high Thursday after rising 52% from the March 23 low. For the year, the stock rose about 5%, beating the S&P 500’s earnings of 2%.

Even after Berkshire’s record buyback in 2020, the company still has a sizeable $ 138 billion stacks of cash. The number is down from $ 145.7 billion at the end of the third quarter.

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